currency

The risk off Friday tone took the New Zealand Dollar (NZD) lower to 0.4615 (2.1670) against the British Pound (GBP) , strange as the Bank of England (BoE) cut rates by 25 points to 4.75%. This must have been fully priced in as markets preferred to buy the Pound. Perhaps the BoE tone surprised markets by saying they see upside inflation risks due to the recent budget. NZ surveyed inflation expectations 1 year out have gone from 2.40% to 2.05% with the 2 year up from 2.03% to 2.12%. The kiwi traded up post the news to 0.4635 (2.1580).

Current Level: 0.4634
Resistance: 0.4685
Support: 0.4565
Last Weeks Range: 0.4591- 0.4648

Last week’s slide to 0.9020 (1.1090) wasn’t sustained, the New Zealand Dollar (NZD) making gains back to 0.9090 (1.1000) this morning. Precious metals markets and the latest Chinese data put pressure back on the Australian Dollar (AUD) as the currency gave back momentum. NZ 2-year Inflation Expectations ticked up from 2.03% to 2.12% with the RBNZ cash rate forecast respectively 4.25% by Dec 24 and 3.25% by September 2025 of note. The Aussie jobs report for October is expected to come in poor and support further kiwi rises.

Current Level: 1.019
Resistance: 1.1090
Support: 1.0970
Last Weeks Range: 1.0990 – 1.1089

Last week’s slide to 0.9020 (1.1090) wasn’t sustained, the New Zealand Dollar (NZD) making gains back to 0.9090 (1.1000) this morning. Precious metals markets and the latest Chinese data put pressure back on the Australian Dollar (AUD) as the currency gave back momentum. NZ 2-year Inflation Expectations ticked up from 2.03% to 2.12% with the RBNZ cash rate forecast respectively 4.25% by Dec 24 and 3.25% by September 2025 of note. The Aussie jobs report for October is expected to come in poor and support further kiwi rises.

Current Level: 0.9074
Resistance: 0.9115
Support: 0.9017
Last Weeks Range: 0.9017 – 0.9099

The survey of New Zealand Inflation expectations 1 year out dropped from 2.40% to 2.05% and the 2-year prediction increased from 2.03% to 2.12%. The report also showed the RBNZ OCR forecast until Dec 2024 is 4.25% and out to September 2025 – 3.25%. Markets seem to be on the fence with either a 50-point cut, or a 75-point cut at the Nov 27 meeting.  The New Zealand Dollar (NZD) remains steady Monday against the US Dollar (USD) around the 0.5960 level having bounced off 0.5975 earlier. US CPI y/y is expected to print higher for October to 2.6% up from 2.4% and could push the kiwi lower into the close of the week.

Current Level: 0.5968
Support: 0.5930
Resistance: 0.6030
Last week’s range: 0.5910 – 0.6037

The Euro (EUR) has performed poorly this week against most main board currencies and has slumped against the Australian Dollar (AUD) to 0.6140 (1.6280) Wednesday before retracing moves back to 0.6125 (1.6330) in early morning. The RBA held interest rates at 4.35% Tuesday siting upside risks to inflation with messy govt electricity subsidies and automotive fuel prices influencing policy. We predict prices to retest the 0.6200 (1.6150) resistance zone.

Current Level: 1.6337
Resistance: 1.6620
Support: 1.6000
Last Weeks Range: 1.6301- 1.6599

The Euro (EUR) has performed poorly this week against most main board currencies and has slumped against the Australian Dollar (AUD) to 0.6140 (1.6280) Wednesday before retracing moves back to 0.6125 (1.6330) in early morning. The RBA held interest rates at 4.35% Tuesday siting upside risks to inflation with messy govt electricity subsidies and automotive fuel prices influencing policy. We predict prices to retest the 0.6200 (1.6150) resistance zone.

Current Level: 0.6121
Resistance: 0.6250
Support: 0.6020
Last Weeks Range: 0.6024- 0.6134

The RBA held interest rates unchanged Tuesday at 4.35% as we expected emphasising the need to remain focused on upside risks to inflation. The Australian Dollar (AUD) rising to 0.5055 (1.9780) before returning to post 0.5112 (1.9560) as US Election voting kicked in. The first rate cut for the RBA may not come until the February meeting in 2025. The RBA may wait until the 4th quarter CPI release on the 29th of January 2025 before making a decision on this. The Bank of England are widely expected to cut 25 points in the morning to 4.75% however they may signal a shallower easing cycle if new budget forecasting comes into play.

Current Level: 1.9607
Resistance: 1.9840
Support: 1.9340
Last Weeks Range: 1.9572- 1.9884

Price action in the Euro (EUR), New Zealand Dollar (NZD) cross has been dictated by US Elections results with the Euro selling off to 0.5565 (1.7970) from 0.5485 (1.8230) over the past couple of days. Markets clearly expecting a Trump presidency. NZ unemployment rose to 4.8% from 4.6% in the second quarter, employers shedding workers until cost pressures ease. This “if anything” confirming further interest rate cuts are needed with prospects now the RBNZ may cut 75 points later this month instead of 50 points.

Current Level: 1.8066
Resistance: 1.8200
Support: 1.8000
Last Weeks Range: 1.7833 – 1.8071